Transcript 0:00 [funky music] Welcome back to Bitcoin Season 2. 0:36 I'm Charlie Spears, uh, host of Bitcoin Season 2, and I'm with Blockspace Media. 0:42 Make sure to check out other Blockspace Media content, such as the Gwork Show, the Mining Pod, the Bitcoin Stock Show, and our newsletters coming out at least twice a week. 0:52 Head to blockspace.media, our website, to subscribe to those. If you're not subscribed to the YouTube channel, Bitcoin Season 2 YouTube channel, we now have a dedicated YouTube channel. 1:02 Search Bitcoin Season 2, all one word, two, like the number. Make sure to like and subscribe. We stream live on X and YouTube. This is the Bitcoin Season 2 live stream. 1:13 I keep it pretty tight, maybe 20 minutes, and I do the kinda metrics, um, uh, news, and typically a short, uh, topic about things that I think are happening in the Bitcoin Season 2 narrative. 1:27 So today is pretty interesting because I've noticed that there's a lot of venture hitting the Bitcoin ecosystem. Now, it's been a bit removed, and, uh, it been looking off in crypto land for a long time. 1:40 Um, but now that venture is coming to Bitcoin, and it seems to be coming in pretty quickly. Especially the past couple weeks, we've seen a lot of big raises announced. 1:51 But before we get into that, I want to do the numbers. So we're gonna just, uh, quickly look through the metrics. Um, volume on Ordinals marketplaces continues to be pretty anemic. It is down and to the right. 2:06 We are looking at, um, maybe, uh, anywhere from $300,000 to $500,000 worth of volume across, um, the primary Ordinals marketplaces of OKX, Unisat, and Magic Eden. 2:22 OKX, once the dominant marketplace, now barely represents, um, uh, a l- you know, over six figures of, uh, volume each, uh, day. Uh, it's now kind of the Magic Eden show, um, with a little bit of Unisat creeping back in. 2:40 Unisat announcing that they're, uh, on track to launch Fractal in September has, I think, caused a bit of a resurgence in trading activity for BRC-20s on that marketplace. 2:50 But overall, it is still, um, uh, down across the board. Not a lot of trading activity across these marketplaces. 2:59 Um, and then even like, uh, I would say major marketplaces like Gamma in a day may not cross $1,000 US in total volume. So this is still pretty significant. Um, let's see. 3:15 That said, even though the volume for the marketplaces is down, on the week, your top collections by trading volume are largely up. 3:25 NodeMonkes is up 20%, Puppets are up 17%, OMB up a few percent, Quantum Cats and Natcats are up. RSIC is down. 3:33 The, um, RSIC Twitter account started tweeting a few weeks ago and, and, uh, caused a huge run on RSIC, and, um, now it [chuckles] seems to be going back down. 3:44 I mean, uh, if, if it's really just a matter of how much the RSIC account tweets, then, um, I do wonder, like, what, uh, what we're all doing here. Maybe that is all this is, just narrative momentum. 3:57 Um, Bitcoin Frogs also up 5%, uh, 6%. So that's, um... Across all the colle- of the top 10 collections, we only see two which are down on the week. So, uh, maybe your bags are coming back up. 4:09 I mean, let's take a look at Runes. Runes also, uh, volume anemic. Prices are down, but, um, we are a little bit up on the week. We're up $50 million across the total Runes market cap. 4:21 Um, still not any signs of that, uh, really recovering. Um, typically each week in the Runes story, there is a token that has pumped a bit. 4:32 This time, this past week, I don't know if I'd really say that Dog got a little bit of a bid, but, um, I'm not really sure we see a whole lot of life there. Shout out to my fellow Runes degens. 4:44 Uh, it is, we are still in the trenches, and we are still grinding away. I don't know what grinding means except, uh, holding your bags. But anyway, regardless, we're there. Um, moving into news, um, 4:57 one of the big, you know, news events this week in broader Bitcoin Season 2 narrative is that Magic Eden is launching a token, uh, ticker ME. In their announcement, they say, 5:11 um, uh, "ME will be adopted by Magic Eden, the largest Bitcoin dApp, NFT, and Runes DEX." Um, the claim will be through their wallet. 5:20 Now, Magic Eden's been rolling out a wallet for the past several months, had it in beta for a while. 5:25 Um, I would say this is a significant new entrant into the wallet landscape, and now that they're making the claim for their, their ticker within the wallet, seems to be kind of like the activation event to look for. 5:39 Um, a couple takeaways from this. One, they describe their Runes pla- uh, their Runes exchange as a DEX. 5:46 Um, I think it's popular to brand things as a DEX, but, you know, m- I don't really know if I would call that a DEX because, uh, y- you know, they're just, uh, s- they're just basically a partially signed Bitcoin transaction, uh, service provider. 6:02 What does that mean? It just means that they are in the business of coordinating the PSBTs to exchange these assets.Now, you might call that a DEX. 6:11 I think it might be worthwhile to define what we mean by decentralized exchange sometime. Um, but they're-- you're really focusing on the dApp thesis, which I think, uh, makes a lot of sense. 6:23 Um, most people and most users in the past two years have come into the broader crypto ecosystem through their dApps. That's just really been the most act- the most... the biggest, like, top of funnel for activity. 6:37 And then they are focusing again on cross-chain. Magic Eden is the, I believe, the largest Solana and definitely the largest Bitcoin NFT exchange right now. So this is their bread and butter. This makes a lot of sense. 6:52 Also in news, we covered this a lot on the Blockspace, uh, kind of in a Blockspace, uh, suite of content. 6:59 But Babylon Chain, uh, launched on mainnet last week, Thursday in particular, and Babylon is a Bitcoin staking platform, and I interviewed the founder of Babylon, David Tse, in last week's episode of, uh, Bitcoin Season 2. 7:16 So they launched on mainnet. They allowed the first thousand Bitcoin through the gate to, to be staked on Babylon protocol. Um, so it became a race. 7:25 On Thursday morning, you could, uh, stake at maximum point zero five Bitcoin at a time, so that was the limit size of the transaction, which caused about twenty thousand transactions competing to get, uh, into these blocks first so that they could be staked on Babylon. 7:43 This created a ten, uh, block run over the course of two to three hours, where you saw crazy high fee rates. In fact, I think the second-highest fee rate of the year, second only to the, uh, 8:01 um, uh, halving event. Uh, this is, uh, pretty remarkable because this is just the first, like, unlock of their staking on mainnet. 8:16 Um, we dive into a bit of this in our newsletter last week. I recommend you go read that, blockspace.media/subscriber. Hit the newsletter. Um, a great thread from, uh, Bitcoin Beezy, uh, on- with Second Gate, 8:31 uh, touches on this, uh, mainly from the mining standpoint, because mining has been very, very unprofitable this, this summer post-halving. Um, 8:46 uh, he talks about the break-even costs of some of the, of the, of, like, the, the most dominant, like most... 8:53 the newest, fastest Bitcoin miner, um, saying that it's very important that we pay attention to, or especially if you're a miner, that you pay attention to this new type of economic participant, the, the stakers, the degens, the meta protocols, because it now dramatically affects your bottom line, [audio glitching] 9:11 revenue events, and create, uh, s-spikes in transaction fees on-chain. Um, in addition to this, uh, this kind of went hand in hand with, I think, another important narrative, which is the, um, 9:27 uh, which is the, the fee rate trading game. Now, if you're... I've talked about it. I've interviewed Leo from Alchemia on this before, but, uh, Alchemia is a Bitcoin fee rate trading platform, A-L-K-I-M-I-Y, whatever. 9:43 I don't know how it's spelled, but you can, uh, just Google it, and you can see that they've been having, uh, a fee rate trading, uh, competition where you can speculate on the, uh, fee rate over the next, basically the next difficulty adjustment period. 9:57 So this is a pretty interesting mechanism, uh, that we saw play out, and we saw Babylon, uh, really change the, uh, settlement of, the average settlement of fee rates in that period. 10:08 So wrapping up the news, I wanna, uh, move on to this topic of, uh, VCs are pivoting to Bitcoin. This is a major narrative that I've seen. 10:20 I've not seen a lot of people talk about this in, like, a packaged, uh, talk before. Um, but, uh, uh, 10:32 but venture, uh, the reality is, if you've been in the broader crypto ecosystem for a while, you know that, um, this has been the case. 10:40 But most of the venture dollars have been allocated outside of the Bitcoin ecosystem, um, and very few dollars comparatively across, uh, everything has been allocated to Bitcoin only or Bitcoin native companies. 10:53 They're usually, like, a company that plugs in Bitcoin, so this is the Web3 venture thesis. 10:58 I have this deck pulled up from Trammel Venture Partners from this past, uh, year, where they go over at a high level the amount of money that's been deployed into the Bitcoin ecosystem from a deal number amount and, uh, and also a total capital raised amount. 11:16 And, um, they've been in the three hundred millions, uh, to three forty-three millions. 11:22 Last year in twenty-twenty three, they saw three hundred million dollars raised from the, like, just the Bitcoin ecosystem venture funds. 11:30 But what's interesting is this is changing a lot, and they actually talk about it in this report, and I'm just going to spend about t- five to ten minutes going over the history of, uh, the, uh, like, venture dollars deployed into the Bitcoin Season 2 ecosystem that I've seen so far. 11:49 I remember last spring, twenty twenty-three, Ordinals Bot, one of the first, like, inscription bots out the gate, raised a million dollars in seed funding. 11:59 Um, this was kind of at the bottom of the bear market, where these new, like, Bitcoin startups had a lot of trouble raising money from, uh, anybody in any kind of size. 12:11 So a million dollars at the time for a Bitcoin company was pretty significant.And if you look at who led this, this was led by Lightning Ventures, Bitcoin Magazine, UTXO. 12:23 Um, this is interesting because these are notable Bitcoin investors, Lightning Ventures in particular, um, a Lightning company, um, focusing on or deploying money into the Ordinals ecosystem. What happened next? 12:37 Well, um, this past spring, again a year later, March twenty twenty-four, Ordinals Bot raises an oversubscribed three million dollars seed, uh, seed round, um, with names such as CMS Holdings. 12:53 Um, again, UTXO on here, uh, Sora Ventures, um, Kinetic Capital. Um, a lot of names on here are not typical Bitcoin venture companies. 13:04 These are companies who this might be their first check in a while, or ever, into the Bitcoin ecosystem, into-- or I would say the Bitcoin first ecosystem. 13:14 Then also, um, this-- I don't have any actual detailed numbers because I don't think this was published, but UniSat, one of the winners of the, uh... 13:23 one of the dominant, uh, marketplaces and ex- and inscription tools for the Ordinals ecosystem, uh, was supposedly getting s- uh, some venture from Binance, Binance Labs. 13:35 Um, supposedly, the rumor was they were raising at a valuation of fifty million dollars about a year ago. 13:41 Um, so this was-- I didn't, I didn't get-- find anywhere that this was confirmed, but a valuation of fifty dollars for a new company in the Bitcoin ecosystem, um, at the bottom of the market in twenty twenty-three is also very significant. 13:56 Then last summer, twenty twenty-three, we saw Xverse raise five million, um, from some interesting names, na- notably Jump. Jump is kinda like the, the crypto venture fund, one of the notable crypto venture funds, 14:12 and this was one of the first, like, actual, like, Bitcoin first, uh, checks they wrote. 14:18 And you see other folks in here, like Bitcoin Frontier Fund, who's been early-stage for almost, um, well, pretty much every single Ordinals company. You see Gossamer Capital, you see Sora Ventures again. 14:30 So, um, you see the, the check sizes are getting larger, uh, week after week. So let's fast-forward to today. 14:40 Two weeks ago, we saw SatFlow, an Ordinals sniping platform, raise seven point six seed round, seven point six million seed round, um, with, uh, led by Variant. 14:51 But I think the, the notable takeaway for me was that Coinbase Ventures is also, uh, participating in this round. Coinbase has kind of snubbed Bitcoin for a long time. 15:03 They don't even have Taproot enabled for user deposits yet. Um, so, uh, Coinbase Ventures writes a check to a Bitcoin first, uh, Ordinals sniping, and, like, uh, kind of like user-facing MEV platform. 15:20 This is very significant. We talked about this a bit in our newsletters about the, about identifying this raise. Um, and, 15:29 uh, then shortly after that, we have Bitcoin Startup Lab, who is on their third or fourth cohort now, and it's a very early-stage, kind of pre-pre-seed startup la- uh, uh, inc- uh, startup incubator. 15:43 Um, they, uh, announce a half a million dollar prize pool, um, which they believe is the largest prize pool in Bitcoin and Web3 this year. 15:53 I think half a million dollars might actually put them at one of the larger Bitcoin, like, uh, hackathon prize pools that I've ever heard of. Then the big one. Uh, Babylon, 16:07 uh, Protocol raised seventy million dollars led by Paradigm this past spring. Um, Babylon, I believe, is, like, the story for Bitcoin Venture so far. 16:21 Seventy million puts this on par with some of the giant, like, crypto L1, uh, seed raises. This is, um, like, as big as some of the, the hot new ones, like, as, like Monad. 16:34 Um, and so, and it r- and includes, you know, a lot of the names from, from all the big people, Paradigm, Polychain, um, Bullish Capital. 16:43 So we're seeing the check sizes get bigger, and the names get bigger, and the names be now... it might be their first, again, their first, uh, check into the Bitcoin ecosystem. 16:54 And then the last one, uh, that I'll bring up is Satlayer, which is kind of a sidebar to Babylon, Babylon narrative. An eight million dollar pre-seed led by Castle Island. That'd be, like, Nick Carter. 17:06 Pack VC, but it has Amber Group, Franklin Templeton, OKX Ventures, Mantle, CMS, UTXO, um, a lot of angels from a lot of the folks, including Custodia, a, like, a pretty hardcore Bitcoin and digital assets bank. 17:21 So, um, I'll be-- on a side note, I'll be interviewing the Satlayer, uh, some Satlayer folks, uh, coming out, uh, later this Thursday. So what am I getting at here? 17:34 You know, in just the, uh, in just the venture names and the, the raises that I identified here, which I would put into kind of a new category of, like, Bitcoin season two venture capital. 17:44 Just the names here, we have over a hundred million dollars, um, ballpark cumulative capital raised over... venture, uh, deployed over the past, um, three hundred and sixty-five days. 17:57 That alone accounts for over a third of the entirety of capital deployed into the Bitcoin ecosystem in twenty twenty-three. 18:04 And I think a lot of that capital, um, can be attributed to mining, which I, at least this number here from the Trammel Venture Partners. 18:12 So, um, which I would put in its own category of, like, capital-intensive infrastructure companies.But now that we're looking at like the software side of Bitcoin Season 2 type investor activity, I think this is going to be a major narrative, especially that given that it does not feel like the, um, 18:33 it does not feel like the, like we've reached this mania part of the market yet. 18:37 It feels like we've, we've paused here for a period of time, um, waiting for, uh, for people to realize that Bitcoin is sitting at or near its all-time high, um, 18:51 and it makes, you know, you can s- if you've been here a few cycles, you can see the writing on the wall that at some point when the market does really, really heat up, we can see, we would expect to see, uh, the numbers start to get very, very silly. 19:05 Um, this is not a forward-looking statement. 19:07 This is me as an individual speculating and using past experience to identify what might happen and, and to kind of strap in because I think, um, we could see a lot of interesting stuff happen in the Bitcoin venture space. 19:22 Um, I think this, you know, there's a bit of a tension between users, retail, the cypherpunks, the, um, people who want to be independent developers and venture, and what I see here is that these are not necessarily competing because at the same time that we're seeing all these, um, uh, seeing that we're-- In the same time that we're seeing all of these, uh, these new checks be deployed, we're also seeing, um, a lot of interesting Bitcoin tech be built out by independent developers. 19:54 Um, so I love to see that. Um, I'll be monitoring this. I'll probably write a newsletter trying to sum up and ca- and, like, uh, uh, accumulate, uh, all of the, uh, 20:05 all of the, uh, stuff being deployed into Bitcoin, uh, so far. But without further ado, thank you so much for watching Bitcoin Season 2. 20:14 I will, uh, catch you on Twitter, but make sure to subscribe to the YouTube channel, Bitcoin Season 2, hit the Blockspace newsletter, blockspace.media, and check out the GORE pod, 20:26 uh, GORE Show mining pod, and, uh, other Bitcoin Season 2 content. Without further ado, adios. 20:31 [outro music]
